Schindler Holding Ltd. · SIX:SCHN
Schindler — Schindler Hldg Ag Akt — FY2021 Earnings Presentation
38 slides from Schindler's earnings presentation, Feb 16, 2022
Slide 1: Annual results 2021 presentation
Annual results 2021 presentation February 16, 2022 © Schindler 2022 I © Schindler 2022 I We Elevate I February 16, 2022 I
Slide 2: Agenda
Agenda 1. Challenges Silvio Napoli 2. New leadership structure Silvio Napoli 3. Financial results 2021 Urs Scheidegger 4. Outlook Urs Scheidegger 5. Q&A Silvio Napoli & Urs Scheidegger 2 I © Schindler 2022 I We Elevate I February 16, 2022 I Investor Relations
Slide 3: Delivering on Top Speed 23 objectives calls for change
Delivering on Top Speed 23 objectives calls for change Execution of core initiatives to be accelerated and refocused Top Speed 23 Core initiatives Goals Industry-leading New installations growth in Portfolio growth/investments customer experience selected strategic markets in mass connectivity Susta
Slide 4: Schindler is lagging competition
Schindler is lagging competition Performance gaps need to be addressed now EBIT adj. development – gap widening again 25.0% 0.0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Schindler Competitor 1 Competitor 2 4 I © Schindler 2022 I We Elevate I February 16, 2022 I Investor Relations
Slide 5: Unprecedented mix of challenges
Unprecedented mix of challenges Effective response to complex environment needed 1. Dealing with foreign exchange burden 2. Regaining competitive new installation (NI) margins 3. Resolving supply chain disruptions 4. Streamlining product portfolio complexity 5. Adjusting for China NI market contract
Slide 6: Challenge #1: foreign exchange burden
Challenge #1: foreign exchange burden Pressure expected to continue due to Swiss franc strength Impact on revenue and EBIT since 2008 >90% of revenue in other currencies than CHF –3 809 –507 CHF EUR USD Revenue, CHF million EBIT, CHF million 2021 CNY OpEx INR Revenue BRL CNY/CHF Others 100 Significa
Slide 7: Challenge #2: regain competitive NI margins - raw material inflation
Challenge #2: regain competitive NI margins Raw material and component cost inflation persisting at record levels Weighted raw material index1) – steep increase… … and same for semiconductor cost2) $40 36.0 CHF/unit 150 $30 +47% Up to 100 $20 26x price increase $10 50 $0 1.4 CHF/unit 2019 2020 2021
Slide 8: Challenge #2: regain competitive NI margins - logistics cost
Challenge #2: regain competitive NI margins Logistics cost dramatically increased, threatening global supply chain effectiveness Shanghai containerized freight index more than quintupled1) Supply chain model under pressure 6000 5000 4000 Make Buy 3000 2000 5.3x since January 1, 2020 1000 0 2019 2020
Slide 9: Challenge #2: regain competitive NI margins - price levels
Challenge #2: regain competitive NI margins Price levels still unable to offset cost inflation impact More price increases are a must to offset increasing cost 120 110 +10% Price level residential elevators country 1 +2% Price level residential elevators country 2 Price level residential elevators c
Slide 10: Challenge #3: Supply chain issues
Challenge #3: Supply chain issues Manufacturing stretched between new modular platform ramp-up and delayed phasing-out of legacy product lines Modular elevators vs. legacy product lines – proportion of old product lines still high Order intake Order backlog 100% 50% 0% 2020 2021 2020 2021 Modular pr
Slide 11: Challenge #4: Accelerate complexity reduction
Challenge #4: Accelerate complexity reduction NI modularity still to be implemented across key segments Status sales release of modular products Factory transition from legacy product to modular platform Asia-Pacific Americas EMEA # of cabin types 8 Residential elevators 7 Commercial elevators 6 5 4
Slide 12: Challenge #5: China NI market expected to contract in 2022
Challenge #5: China NI market expected to contract in 2022 Sharpened focus on strategic growth pockets required – pressure only partially offset by growth in service and modernization Floor space started growth (6 months average) Housing inventory by city tiers (2014 =100) by city tiers 120% 160 100
Slide 13: New leadership structure to navigate mix of challenges
New leadership structure to navigate mix of challenges “Top Speed 23” set-up: more speed, agility and impact Corporate Governance Structure Key Changes Silvio Napoli Chairman & CEO Combined Chairman & CEO: ▪ faster decision-making ▪ strategic priorities impact Paolo Compagna CFO Group HR COO New COO
Slide 14: Financial results 2021 in a nutshell
3. Financial results 2021 in a nutshell ▪ Global markets recovering at various speed ▪ Order intake and revenue back to 2019 pre-pandemic levels ▪ Operating results affected by supply chain issues, electronic shortages, material and freight cost inflation and delayed deliveries and construction site
Slide 15: Global markets have continued to recover in 2021
Global markets have continued to recover in 2021 Mixed recovery patterns across geographies, product lines and segments Market growth vs. 2020 China APAC w/o China Americas EMEA Global By business (units) New installations (NI) Maintenance By business (value) New installations (NI) Maintenance By ma
Slide 16: Order intake development
Order intake development Back to pre-pandemic level, margins under pressure October to December January to December in CHF million in CHF million +10.6 1) 12 123 12 166 11 018 +10.4% +7.3 2) +5.9 1) +0.4 3) 3 114 2 951 3 128 +6.0% +7.3 2) +0.4 3) Q4 2019 Q4 2020 Q4 2021 FY 2019 FY 2020 FY 2021 1) Gr
Slide 17: Order intake growth by region and product line (full year)
Order intake growth by region and product line (full year) Growth across all regions and product lines, activity levels maintained in the second half of the year Growth 12M 2021 vs. China APAC w/o China Americas EMEA Global 12M 2020 By business (units) New installations (NI) Maintenance By business
Slide 18: Revenue development
Revenue development Full year back to pre-pandemic level, Q3 slowdown continued Q4 October to December January to December in CHF million in CHF million +5.7 1) 11 271 10 640 11 236 +5.6% +6.3 2) –0.3 3) +0.6 1) 3 016 2 927 2 954 +0.9% +4.2 2) –2.1 3) Q4 2019 Q4 2020 Q4 2021 FY 2019 FY 2020 FY 2021
Slide 19: EBIT adj. development
EBIT adj. development Margins below pre-pandemic level, Q4 drop driven by supply chain issues October to December January to December EBIT adjusted EBIT adjusted in CHF million in CHF million 1 314 +5.4 1) 1 185 1 252 +5.7% +1.5 2) –10.6 1) –4.7 3) 364 341 306 –10.3% –11.5 2) –15.9 3) Q4 2019 Q4 202
Slide 20: Net profit development
Net profit development EBIT impacted by Top Speed 23 cost ramp-up in Q4 October to December January to December in CHF million in CHF million 929 881 774 +13.8% +–5.2 1) 249 226 192 –15.0% –22.9 1) Q4 2019 Q4 2020 Q4 2021 FY 2019 FY 2020 FY 2021 1) Growth vs. 2019, in % 20 I © Schindler 2022 I We El
Slide 21: Cash flow development
Cash flow development NWC improvement less pronounced than in 2020 October to December January to December in CHF million in CHF million 1 581 2) –16.9% 1 314 1 185 626 529 +10.9 1) –43.1% 356 –32.7 1) Q4 2019 Q4 2020 Q4 2021 FY 2019 FY 2020 FY 2021 Change –6 272 59 NWC Cash flow from operating acti
Slide 22: Top Speed program update
Top Speed 23 program update CHF 58 million spent in 2021 – further acceleration needed Core initiatives Status % expenses of full program EBIT Impact as of (year) New installations growth in Growth above market in all selected strategic markets key markets, margins to be improved 5 – 10% 2022 Portfo
Slide 23: Outlook 2022
3. Outlook 2022 23 I © Schindler 2022 I We Elevate I February 16, 2022 I
Slide 24: Market outlook 2022
Market outlook 2022 Market growth burdened by NI slowdown in China Market growth in units China APAC Americas EMEA Global w/o China New installations Total Residential Commercial Public transport Existing installations Total Modernization Maintenance negative positive Source: Schindler estimates 24
Slide 25: Outlook 2022
Outlook 2022 As of February 16, 2022 Business environment Schindler outlook for 2022 ▪ China market contracting, RoW mixed ▪ New leadership structure in place to ▪ Construction site delays continue to hinder move faster and with more impact project execution ▪ Price increases across all products ▪ M
Slide 26: Q&A
Annual results 2021 presentation Q&A 26 I © Schindler 2022 I We Elevate I February 16, 2022 I
Slide 27: Financial calendar 2022
Financial calendar 2022 2022 2023 Full year results media conference February 16 February Closing date of shareholders' register March 15 Ordinary General Meeting Schindler Holding Ltd. March 22 March 28 1) First trading date ex-dividend March 24 1) Date of Schindler Holding Ltd. dividend payment Ma
Slide 28: Additional charts
Additional charts 28 I © Schindler 2022 I We Elevate I February 16, 2022 I Investor Relations
Slide 29: Order intake growth by region and product line (4th quarter)
Order intake growth by region and product line (4th quarter) Continued growth across the board, decelerating momentum particularly due to tougher comparables Growth Q4 2021 vs. China APAC w/o China Americas EMEA Global Q4 2020 By business (units) New installations (NI) Maintenance By business (value
Slide 30: Key figures as of December 31, 2021 - Q4 2021/2020
Key figures as of December 31, 2021 October to December 2021/2020 In CHF million Q4 2021 Q4 2020 r% r% in LC Order intake 3 128 2 951 6.0 5.9 Revenue 2 954 2 927 0.9 0.6 Operating profit (EBIT) 253 298 –15.1 –15.4 in % 8.6 10.2 Operating profit (EBIT), adjusted 306 1) 341 2) –10.3 –10.6 in % 10.4 11
Slide 31: Key figures as of December 31, 2021 - Q4 2021/2019
Key figures as of December 31, 2021 October to December 2021/2019 In CHF million Q4 2021 Q4 2019 r% r% in LC Order intake 3 128 3 114 0.4 7.3 Revenue 2 954 3 016 –2.1 4.2 Operating profit (EBIT) 253 335 –24.5 –20.3 in % 8.6 11.1 Operating profit (EBIT), adjusted 306 1) 364 2) –15.9 –11.5 in % 10.4 1
Slide 32: Key figures as of December 31, 2021 - FY 2021/2020
Key figures as of December 31, 2021 January to December 2021/2020 In CHF million FY 2021 FY 2020 r% r% in LC Order intake 12 166 11 018 10.4 10.6 Revenue 11 236 10 640 5.6 5.7 Operating profit (EBIT) 1 166 1 032 13.0 12.7 in % 10.4 9.7 Operating profit (EBIT), adjusted 1 252 1) 1 185 2) 5.7 5.4 in %
Slide 33: Key figures as of December 31, 2021 - FY 2021/2019
Key figures as of December 31, 2021 January to December 2021/2019 In CHF million FY 2021 FY 2019 r% r% in LC Order intake 12 166 12 123 0.4 7.3 Revenue 11 236 11 271 –0.3 6.3 Operating profit (EBIT) 1 166 1 258 –7.3 –1.0 in % 10.4 11.2 Operating profit (EBIT), adjusted 1 252 1) 1 314 2) –4.7 1.5 in
Slide 34: Revenue development: supply chain disruptions and project delays
Revenue development Supply chain disruptions and project delays FY 2021 FY 2021 Revenue bridge Revenue by region in CHF million EMEA (–) USD Americas (–) BRL China 2021 2020 (–) TRY Rest AP (+) RMB Asia-Pacific 30% 28% (+) EUR (+/–) Others Americas 26% 27% EMEA 44% 45% <5% 5% to <10% 10% to <20% >20
Slide 35: Operating profit development
Operating profit development Slowing momentum from Q3 FY 2021 EBIT adjusted bridge in CHF million (–) USD (–) BRL (+) RMB (+) EUR (+/–) Others 35 I © Schindler 2022 I We Elevate I February 16, 2022 I Investor Relations
Slide 36: Dividend proposal to the Annual General Meeting of CHF 4.00
Dividend Proposal to the Annual General Meeting of CHF 4.00 Dividends Schindler Holding Ltd. in CHF 5.00 4.00 3.00 Dividend proposal 2.00 Ordinary dividend 1.00 0.00 2017 2018 2019 2020 2021 52.0 45.5 49.8 59.5 52.0 Pay-out ratio in % of earnings per registered share/participation certificate. 36 I
Slide 37: Quarterly overview key figures
Quarterly overview Key figures In CHF million 2021 2020 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Order intake 3 128 2 995 3 106 2 937 2 951 2 712 2 635 2 720 Revenue 2 954 2 807 2 873 2 602 2 927 2 754 2 512 2 447 Operating profit (EBIT) 253 306 319 288 298 313 255 166 in % 8.6 10.9 11.1 11.1 10.2 11.4 10.2 6.8 Oper
Slide 38: Balance sheet
Balance sheet In CHF million 31.12.2021 in % 31.12.2020 in % Cash and cash equivalents 2 841 23.7 2 483 22.8 Other current assets 5 436 45.4 4 892 45.0 Total current assets 8 277 69.1 7 375 67.8 Non-current assets 3 697 30.9 3 502 32.2 Total assets 11 974 100.0 10 877 100.0 Current liabilities 5 955